Armstrong Economics Blog/Real Estate Re-Posted Feb 3, 2023 by Martin Armstrong
QUESTION: Dear Sir,
Hello from Europe and a hopeful new year.
In WW2 in Athens, people were exchanging their apartments for a few liters of olive oil, hence real estate went really down.
The short question that you can answer even with a yes or no:
If this year’s aggressivity in terms of war actions will rise, what happens? Will real estate fall on the first stage and then – due to governmental actions – will rise again?
It is a bit confusing while I am trying to understand the mechanism… economy is not simple at all.
ANSWER: The real truth about real estate and war, declines the closer you get to the action. When we look at our models for European real estate, it clearly shows 2023 as a directional change and it appears to be heading into a Panic Cycle for 2027. Our leaders project like we should all go charge into Russia and defeat it in a matter of weeks or just days. Besides the fact that they never discuss that civilian deaths are twice as high as military, they also never talk about how the net worth of everyone in Europe will decline. Your house will decline in value for (1) people are not interested in buying a new home in times of uncertainty, and (2) interest rates will rise sharply due to inflation which is also part of the war cycle.
Lydia, in modern Turkey where coins were invented, shows the impact of war. It was Lydia v Person (Cyrus the Great) and we see the very first debasement in recorded history which accompanies war. The coinage was debased showing roughly a 25% devaluation in the purchasing power during the 6th century BC.
The Peloponnesian War in Greece saw the Athenian Owl reduced from silver to bronze and just silver plated. We find the same trend in Rome. There is NEVER any exception to this rule.
Beware, as the West insists upon expanding this war, you are sacrificing all your life savings in real estate for the political nonsense of our leaders in Europe as a whole. They are true war criminals. They could settle this in a day. Just honor the Minsk Agreement.